In
recent years, video game publishers have begun to employ predatory mechanisms
designed to exploit human psychology to compel players to keep spending money
in the same way that casino games are designed.These mechanisms allow players to purchase chances at winning rewards
within games, similar to a slot machine.One common variety of this type of predatory mechanism, known as a loot
box, can present the same psychological, addictive, and financial risks as
gambling.The legislature notes that there
are even online marketplaces where players can buy and sell digital items won
from loot boxes and other gambling-like mechanisms in many games, enabling
players to effectively cash out their winnings.

The
legislature further finds that the American Psychiatric Association has incorporated
diagnostic criteria for internet gaming disorder as a condition warranting more
clinical research and experience, in order to feature this diagnosis in future
versions of the Diagnostic and Statistical Manual for Mental Disorders. The World Health Organization has defined gaming
disorder, characterized by a pattern of persistent or recurrent gaming
behavior, and plans to add this disorder to the latest version of its list of
diseases and mental health conditions, the International Classification of
Diseases.Mental health experts have
raised particular concern about the exposure of youth and young adults to
gambling-like mechanisms, which can affect cognitive development and lead to
addiction, and to which youth and young adults are particularly vulnerable.

There
is currently no age restriction on games that include loot boxes and other
exploitive gambling-like mechanisms, and the legislature notes that games
featuring these mechanisms are often marketed to youth.Furthermore, there are no disclosure
requirements that these types of games may contain predatory, potentially
harmful loot boxes and gambling-like mechanisms. The legislature also notes that game publishers
can insert gambling-like mechanisms into games at any time via game updates,
without prior player or parental knowledge.

Compared
to casinos, games rarely disclose the odds of winning items of value in
loot boxes or in-game gambling-like mechanisms.Video games also lack gaming commissions to ensure players are being
treated fairly and not being exploited by gambling-like mechanisms that do not
pay out as advertised.Furthermore, game
publishers have already begun to develop algorithms that are far more
exploitive than casino games and can change the odds of winning valuable items
in real time, based on a player's reactions and likelihood of continued
spending.

The
legislature additionally finds that no meaningful protections exist to prevent
consumers, particularly vulnerable youth, from being exploited by predatory
video game mechanisms that are aggressively marketed on smart phones, gaming
consoles, and personal computers.Unlike
traditional card games or other games of chance, the ubiquitous reach of video
games, which require active, lengthy participation and exposure to the
psychological manipulation techniques of exploitive loot boxes and
gambling-like mechanisms, presents potentially harmful risks to the financial
well-being and mental health of individuals, especially vulnerable youth and
young adults.

Accordingly, the purpose of this Act
is to prohibit the sale of video games that contain a system of further
purchasing, including a randomized reward or a virtual item that can be
redeemed to directly or indirectly receive a randomized reward, to consumers
under twenty-one years of age.

SECTION 2.Chapter 481B, Hawaii Revised Statutes, is amended by adding a new
section to be appropriately designated and to read as follows:

"§481B- Video games; restrictions.(a)It shall be unlawful for any retailer to sell to any person under
twenty-one years of age a video game that contains a system of further
purchasing that includes:

(1)A randomized
reward; or

(2)A virtual item
that can be redeemed to directly or indirectly receive a randomized reward.

(b)For purposes of this section:

"Randomized reward"
means a reward in a video game that is based on a variable ratio schedule,
wherein a player receives a reward after a random number of actions.

"Retailer" means any
person who offers video games for sale, including resale by the purchaser,
through any means, including sales outlets, catalogs, or the Internet.

"Video game" means an
object or device that stores recorded data or instructions, receives data or
instructions generated by a person who uses it, and, by processing the data or
instructions, creates an interactive game capable of being played, viewed, or
experienced on or through a computer, gaming system, console, or other
technology."

SECTION 3.New statutory material is underscored.

SECTION 4.This Act shall take effect upon its approval.

Report Title:

Video
Games; Prohibition; In-game Purchases; Randomized Reward

Description:

Prohibits
the sale of video games that contain a system of further purchasing to
consumers under 21 years of age.(SD1)

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.